New Kid on the Block: Cyber Insurance in Canada
You have property and liability insurance, but how secure is your digital data? Did you know that, if someone stole sensitive material from your company’s computer system, you would have no recourse? Theft of digital data hasn’t been too much of a concern until recently. IT experts and risk managers have probably told you not to worry about your network – it’s impenetrable, they say. However, data breaches are becoming more common as companies struggle to figure out how to keep hackers at bay. Maybe it’s time to reconsider cyber insurance.
What Is It?
There’s a big push in Calgary insurance to get the word out. Cyber insurance works like an ordinary liability policy, except that it protects your virtual data. It addresses the first, and third-party risks commonly associated with running a web-based business.
Even if you have a brick-and-mortar operation, you probably have a website, take credit card info via a secure server, and store sensitive customer information on your network. Cyber insurance covers this type of information against theft, virus transmission, or any other serious threat that may be passed from first to third-party companies.
Who Can Benefit From It?
Basically, any company that does business over the web benefits from this type of insurance cover. Financial services companies, especially benefit from it since most of the data these days is stored in massive databases.
Because many businesses disseminate information via the web, they open themselves up to the same types of liabilities that publishers have always had. These risks include copyright infringement, defamation, and even invasion of privacy. For example, if you use a copyrighted image without authorization, you could face serious legal repercussions from the copyright owner. Even if you think you have purchased the right to republish something, you might be surprised to know that licenses are not always valid for what you intend to use the image for.
Some copyright licenses strictly limit what you can do with an image, song, or some other piece of intellectual property. Since stock photos, music, and video is becoming more and more common on the web, you only increase your risk by using them and not having proper protection in place.
When Should You Get Coverage?
If you have a website, you have inherited the legal liabilities of a publisher. Creating a website is easy – protecting yourself from a host of potential legal battles isn’t. Because of this, if you have a website, you should seriously consider buying cyber insurance.
Which Companies Are At Serious Risk
Companies in or related to financial services, education, healthcare, and dissemination of any copyright material are at a higher than average risk, since the information transmitted by companies in these industries is highly sensitive.
Any time you accept and transmit credit card information, you carry a liability risk too. Since most companies on the web accept credit cards via a secure server, most companies probably need at least some basic liability protection – protection not covered by your existing business liability cover. Sure, you have to shell out more money for insurance, but it’s often better to be safe than sorry.
John Wilber is a computer forensics expert of many years. In his spare time, he likes to help others by posting on various blog sites.